Good morning to everybody, and great to be with all of you here. Who came in here by car today? Just curious. Just one. Everybody else tube, train? Okay, you guys were clever, I must say. I won't tell you what happened to me this morning. Anyway, I'm delighted really to be here this morning, and we can talk more about that over the break. It's really great because we're gonna have an opportunity today to spend some quality time to review ConvaTec's performance, both from a strategic perspective and from a financial perspective. You're probably familiar with our disclaimer, so I just wanted to go ahead and put it up there.
What we're gonna try to do though is, Jonny and I are gonna have a little bit of a duo here, and we're gonna try to facilitate really a discussion with all of you here today. If you say, "Hey, what are the key takeaways you'd like to share with us?" There really are four key takeaways I'd like to share with you today. The first one is when you look at 2022, fundamentally, we had a strong financial performance, and that was despite a challenging context, right? The level of inflation, geopolitical situation, it was a challenging context. If you then go on and say, "Well, what about your competitive position as a business, what happened there?" Fundamentally, what I'm trying to share with you is that we've really strengthened our competitive position across all four categories and across the entire value chain.
Third thing you might be saying is, "Well, Karim, Jonny, what are the prospects for 2023?" Fundamentally, what we're here to share with you is that we're gonna continue to deliver sustainable and profitable growth in 2023. If you're posing the question and saying, "Well, what about medium-term? What's the medium-term outlook?" You're gonna get a sense that fundamentally it's very attractive, both from a strategic perspective and from a financial perspective. At this point, why don't we jump on in? I'm gonna pass the baton to Jonny, and let's talk about the financials. How did we do in 2022? Jonny, it's all yours.
Thanks, Karim. Good morning, everybody. This was a strong set of financial results for 2022, and I want to make three points about them, which we'll go through in more detail in the following slides. First of all, good sales growth. Nearly 7% on a constant currency basis and 5.6% organic, which is in the top quartile of our medium-term guidance range. Second was operating margin. Expansion of 180 basis points despite a very substantial inflation headwind. Third is strong cash flow. We delivered adjusted EBITDA of $500 million, and that enabled us to invest in the business for future growth whilst maintaining a strong balance sheet with leverage of 2.1x . Let's look first at sales.
This slide, which is page seven for those dialing in, shows our good revenue growth across the categories. You can see on the top row there, total growth, 12.7% for Wound Care on the left and 10.2% for Infusion Care on the right. Those were the two categories that led the way. There was a substantial FX headwind. You can see that too on the far right, 5.2%. The second row shows you the organic sales growth, and I'm gonna go through that by category next. On the bottom left of the slide, you see there the contribution from the acquisition of Triad, now called ATT. $35 million in its first part year, and Karim is gonna talk about that more later.
For the other three categories, the differences between the total sales growth and the organic sales growth, relatively small, mostly relate to the exit from the hospital care business, which was delivered ahead of plan on both timing and cost. Let's look at sales by category, starting on page eight at the top with wound care. Organic growth of 6.8% in a relatively normal year. 2020 and 2021, the growth rates were distorted by COVID. 2022 was mostly through that. Now, in North America, sales were close to flat with good growth in many areas, but moderated by our weaker position in foam. In 2023, we're pleased that we've started launching our new better product, ConvaFoam, which Karim will talk about later. In Europe, there was good growth across most regions, and in GEM, growth was strong.
Mid-teens percentages, that benefited from strategic initiatives in key focus markets, such as rolling out CRM, increased account penetration, and enhanced professional education. Going forward, in advanced wound care, we expect to continue to deliver mid to high single-digit growth rates. In 2023, that will be slightly weighted towards the second half because of the strong comparatives in H1 in 2022. At the bottom of the page is continence and critical care. Organic growth rate of 3.6%. Two very different components. Continence grew at 5%, with HSG gaining more new patient starts and good customer retention in the USA. With good performance across the portfolio of Cure and GentleCath products.
Critical care was down 1.3%, that was as hospital care was excluded after the end of May following the closure of the Belarus factory. FMS was double-digit decline because of a very strong COVID-impacted comparative. Now going forward, this category will just be continence care, and we expect to continue to deliver mid-single digit growth rates in continence care. Moving on to page 10. At the top is Ostomy Care. Organic growth of 3.4%. About double what it's been in recent years. In the U.S., new patient starts have been stabilized. There, and in Europe, the growth in 2022 was moderated by our SKU rationalization program, which was good for margin, and we'll see that in a moment. Going forward, this rationalization is going to be much less of a headwind.
In GEM, growth was strong, mid-teens percentages, benefiting from the same improvements in commercial execution as in advanced wound care. Overall in Ostomy, it's worth noting that ConvaTec was up over 5%, going forward, we expect mid-single digits growth from this category, which is much better than it has been in the past. At the bottom of the page is infusion care with organic growth rate of 9.8%. Strong growth arising from the increasing penetration of automated insulin delivery in type one and type two diabetics. The market for durable pumps grew about mid-single digits, our revenue benefits in addition to that from improving product mix.
We expect to continue to deliver mid-single, sorry, high single-digit growth in Infusion Care because of growing market and improved product launches, product innovation and mix. In 2023, that growth will be weighted much more to the second half because in 2022, it was a very sharp comparative in the first half. High single digits going forward. Let me move on to operating margin, where we increased by 180 basis points, and that's the first time ConvaTec has increased its margin in four years. It was despite COGS inflation of 8.6%, which was as we had expected, and that led to a headwind of 320 basis points. It was also despite further investment in research and development and in sales and marketing of 80 basis points.
This improvement was achieved in three different areas. In mix and price, we added 170 basis points to gross margin. That was benefiting from the SKU rationalization and the increase in ConvaTec product that I mentioned in the category sales. It was also benefiting from the exit of hospital care and the entry to ATT. It was benefiting from better commercial execution in the business units in collaboration with our centers of excellence in sales force and in pricing. There were 70 basis points in operations as we improved productivity through continuous improvement as the simplification agenda gets started there. In G&A, there was 260 basis points of improvement where we really gained traction. You know, we're leveraging the Global Business Services platforms that have been established in Lisbon and now in Bogota as well.
Standardizing processes and simplifying led to significant improvements in productivity, particularly in finance and in IT. A big part of the savings was also removal of expensive external spend. We've built in-house capability to deliver our transformation programs, which is much more efficient. This improvement in G&A was a bit ahead of schedule. It will continue, but not at the same rate. Nevertheless, we're on track for our target of 7% of sales within a few years. Adding all that lot up together and with an 80 basis point tailwind from FX, we delivered an operating margin of 19.5%. On page 11, we're showing the bottom half of the P&L with the adjusted numbers. Operating profit grew double digit at 11.6%, which is the first time ConvaTec has achieved that.
PBT grew a bit slower at 9.1% because of increases in market rates for financing and FX hedging. The net profit and EPS declined by about 3% because of a big increase in the book tax rate. That was as expected, and as we announced last half year, it was because of the recognition of deferred tax assets in the USA. It's accounting, not cash, excuse me. It is tax. Not cash. The cash tax rate remained at about 15%, similar to the year before. Finally on this slide, the board has decided to recommend an increase in dividend of 3%, which is intended to reflect the improvement in the underlying performance of the business and confidence in its future growth prospects. Moving on to cash flow then.
This bridge on page 12 shows our net debt from the beginning of the year to the end of the year. You can see very strong cash generation with adjusted EBITDA of $500 million, up nearly 8% year-on-year. In the middle of the chart, we invested around $400 million in making the business stronger for the future in three areas. First of all, inventory increased by $58 million. Now this was a mix of raw materials and finished products to improve the resilience in our supply chain. It took our days in stock from 140 to 170 on average. Secondly, we stepped up CapEx, and I'm gonna talk about that next.
We invested $204 million in M&A, which was the ATT acquisition I've already mentioned, and also a minority stake in BlueWind Medical, which is an exciting technology in the continence space. We ended the year with net debt just over $1 billion, and leverage at 2.1x as guided and close to our target of 2x . CapEx, we increased investment by $50 million in the year to drive future profitability and growth. On the left, you can see the CapEx by category, and if I work up from the bottom of that graph, we added capacity, mostly in Infusion Care, and that was to support the strong sales growth. We increased innovation to support the new product pipeline.
We added automation, mostly in our wound care facility at Deeside. This is to drive productivity. We continued to invest in digital, in CRM, and in omni-channel customer platforms. This CapEx was a bit ahead of where we had guided. It included a small acquisition element of $10 million. Mostly it was accelerated delivery of projects to improve capacity and automation in operations. Really good progress. For 2023, we expect to make continued progress in sales growth and improving profitability. Before I talk about that, let me just describe the inflationary outlook we see, which is set out here on page 14. On the left is the breakdown of our COGS and OpEx. On the right are the indications of where we see the inflationary pressures year on year.
In 2022, COGS inflation finished at 8.6%, which was bang in the middle of the range we had guided, so as expected. Labor was just a bit over 3%. Going into 2023, some of the price pressures are rebating in COGS, and in particular in resins and in freight. We do expect inflation in 2023 to be lower than 2022, but still very high by historic standards at between 5% and 7%. Conversely, the inflation in labor, which impacts OpEx, is increasing, and we think that also will be 5%-7% range, which is about double the year before. When taken together, that inflation represents a headwind going into 2023 on our EBIT margin of about three points. A little bit less than we suffered in 2022, but not much less.
Our guidance for 2023 is set out on page 15. We expect to deliver organic sales growth of 4.5%-6%, which is consistent with the range of medium-term guidance that we shared in November at the capital markets event. This growth, excuse me, will be weighted to the second half, because in the first half, the comparables are much higher, especially in Infusion Care. ATT will be added to organic sales growth from mid-March and will be included completely in the second half of the year. Second half weighting. On EBIT margin, we expect to make further progress. We do expect to be able to offset that substantial inflation headwind that I've just described, albeit only modestly.
We're pointing to an increase of about 20 basis points in EBIT margin on a constant currency basis, which would mean a margin of no less than 19.7%. It will be another year of investment. We anticipate between $120 million-$140 million of CapEx in categories very similar to where they were invested in 2022. And a bit more inventory, about $20 million to secure that supply chain. This can all be managed while maintaining a strong balance sheet with leverage approximately flat on 2022 and close to our target level of 2x . I'll just finish with a word on outlook beyond 2023. This is similar to a slide I shared at the capital markets event in November.
We are still confident of delivering a mid-20% margin, on operating profit. We finished 2022 a bit ahead of expectations. The building blocks to get to mid-20s are still the same. The three big bricks of simplification and productivity, mix and price, and operating leverage are within our control, and we will continue to deliver on those. Inflation is a macro uncertainty, and that's why we don't wanna be precise about the timing of when we will get to this target of mid-20s. We will make progress every year. Thanks very much for listening. I'll now hand back to Karim.
Super. Thanks, Jonny. That was really, very, very helpful. What I'm gonna try to do now is really focus on what's driving this strong financial performance, and what are the prospects moving forward. The first thing I wanna highlight to you is that fundamentally, we've strengthened our competitive position. We've strengthened our competitive position across the entire value chain, and we've done that across all four categories. FISBE should be pretty familiar to you. This is really our corporate strategy, where we fundamentally say, "We need to focus. We need to innovate. We need to simplify. We need to build capabilities and execute." Let's just take each one and try to understand how much progress have we actually made. If you think about focus, what we basically said is, we wanna focus and win in four categories and in 12 geographies, right?
What did we do? We looked at businesses like hospital care. We didn't have scale. They weren't really growing. Profitability was quite modest. We didn't think we could win, so we exited that business. That was a deliberate strategic move. On the other hand, we've said, "You know what? Wound care, that's a core business of ours. We wanna win." We've always said the USA and China are uber important. What did we do? We acquired Triad Life Sciences, which we now call ATT. We enter the wound biologics segment, and all of a sudden, we have a stronger competitive position in advanced wound care, and you'll see us continue to do that. What that translates into is, fundamentally, over 90% of our revenues come from chronic care markets. Why is that relevant? Two reasons.
Number one, all these chronic care markets are fundamentally growing 4%-8%. Second, when you're working in chronic care, that creates for a much more of a recurring revenue business model. Now all of a sudden, that is consistent and coherent with being a defensive growth stock. I think you're seeing that here, even in our numbers. The second thing is innovation. We've more than doubled our investment in R&D. Are we starting to see some of the fruits of our hard labor? I think the short answer is absolutely yes. In 2021, we launched one new product. In 2022, we launched three new products. In fact, we went ahead and launched InnovaMatrix in the whole area of biologics wound treatment. We went ahead and launched GC Air, GentleCath Air for Men, okay, leveraging our proprietary GentleCath technology.
We've launched that in the U.K., and in France. We went ahead and made sure to launch Mio Advance Extended Wear, an infusion set that lasts a whole week, has clinical benefits, has environmental benefits, also in the United States. Clearly, we're driving that innovation agenda. We'll talk more about 2023, where we'll be launching four new products this year, right? There's a clear acceleration. Simplification and productivity. This is a key driver of being able to expand the margin. I think you've seen proof in the pudding now. We are increasing our operating margin. I know it's an N of equal to one. I tend to believe you need at least an N of equal to three to be able to draw the conclusion. Fair enough, you can't get to three without the first data point, right? Guess what?
G&A got knocked down from approximately 11% of sales down to 8.9%. That's significant improvement. No other way to describe it. If you think about commercial productivity, our call frequency, our calls per day of all of our commercial organization increased in 2022 by 13%. On a cumulative basis during the course of the last three years, we've increased our commercial productivity by approximately 38%. What about the whole area of building capabilities? In this area, we put in place a marketing center of excellence. We launched a refreshed brand, forever caring. This refreshed brand has been really well-received by healthcare providers, by consumers.
We're leveraging it across a whole series of platforms, numerous digital media platforms in our packaging, so we're getting a positive response. The second thing you'll notice is that when it comes to our pricing center of excellence, we're also leveraging it in the sense that we're much more disciplined between the center of excellence and the four business units and having discipline around strategic pricing and tactical pricing. We were able to increase our revenues by about 130 basis points as a result of price in 2022. What about execution? At the end of the day, you can have all the most beautiful strategies, but you got to get it done. We're very, very focused about consistently increasing our do-say ratio.
As we think about increasing that do-say ratio across the value chain, all the categories, we made a decision to embed ESG. We didn't want it just to be an acronym, something you just add on, right. We are very conscientious about four key stakeholders, one being the community or the planet, two being customers, three being colleagues, four being commerce, how do we operate? I'm gonna give you a lot more color as to how are we actually embedding that and executing against that. Bottom line, ConvaTec today is in a much stronger competitive position than it was several years ago. Let's look at the four categories and understand what did we actually achieve in 2022, and what do we plan on getting done in 2023.
When you look at the wound care business, the first thing you'll note is that the gold standard is actually AQUACEL Ag EXTRA. In fact, we grew that franchise double digit in 2022. Above and beyond that, we decided to enter the rapidly growing and very large wound biologics segment. It's a $2.2 billion segment growing at approximately 7%. InnovaMatrix, guess what? That dog hunts. Clinically, we're getting a very positive response from clinicians in the United States. Beyond that, historically, there's another segment which is very large. It's called the foam segment, about a $1.8 billion segment, growing at approximately 6%. Our product offering hasn't been as competitive as we would have liked. We developed a new product. We received clearance from the FDA last year.
Right now in the United States, we're in the midst of launching it. That's a key priority to have a successful ConvaFoam launch in 2023. What's better about it? two key things. First of all, its absorption rate has been increased by 60%, okay? That's a significant increase. Its adhesion properties have been significantly improved. You might say, "Well, what does that mean practically, Karim?" What it means practically is that when you're using our wound dressing, because it adheres better, you can actually use it for a longer period of time. As a clinician, guess what? That translates into dollars and cents. Also as someone who uses it, guess what?
I'm paraphrasing, but one of the reactions we got was, "Wow, it adheres really well, but it's not sticky." Just try to imagine if you're using that kind of a wound dressing. Sounds very simple, but guess what? When you think about retention and wanting to use that kind of a wound dressing, it's a big plus. The initial reactions, very early days, okay, from the evaluations we're getting in the United States, I would say are positive and encouraging. Beyond that, what we said is we wanna grow InnovaMatrix to treat very difficult or hard-to-treat wounds, things like diabetic foot ulcers. How are we gonna do that? We're gonna do that in the hospital channel. We're gonna do that in the outpatient wound clinic channel. We're gonna go ahead and do that in surgeons' offices.
As we do that, we're adding new indications, new indications such as a burn indication, new formulations, a powder formulation, and we're looking to go ahead and develop InnovaMatrix and launch it outside the United States. We do see opportunities both in Europe and in global emerging markets. Thirdly and lastly, there's another segment where we're not, frankly, taking full advantage of the opportunity. That's the single-use negative pressure wound therapy. We're not satisfied with the level of competitiveness of our current offering. What are we doing? We're developing ConvaVac. ConvaVac is in development, and we're very committed to wanting to participate in a $400 million segment that's growing at about 20%.
Hopefully, you're getting a sense that the wound care business, a really good business, roughly 7% organic revenue growth in 2022, and you should expect this business to deliver mid-to-high single-digit growth moving forward. What about Ostomy Care? An encouraging picture. Jonny commented on the 5.5% growth in ConvaTec product. Where is that happening primarily? In global emerging markets. In places like Colombia, Brazil, China. We're growing share. It's a positive story. We're also growing our business in some key and important markets in Europe, such as in Italy, such as in Poland. In the U.S., where we've been bleeding for a long time, new patient starts where they had been decreasing, they're flat now. I'm not saying we're doing great. I'm just trying to tell you there was an improvement.
Beyond that, there's a segment of Ostomy Care which we call accessories. I frankly don't like the term accessories all that much because these are actually essential products. What they are, they are products, for example, when you're applying the barrier, which then you apply the pouch to, right, directly onto the stoma. Guess what? These products avoid skin irritation and can avoid skin infections, and you apply it before you apply the barrier and when you're taking it off. Here we've got a formidable offering with our Ascenta line, and it's also growing double digit. What about moving forward? What is it that you need to fundamentally do to ensure you're growing Ostomy Care? Well, fundamentally, what we need to do is to make sure that we're executing commercially in a consistent manner across the continuum of care.
You say, "Well, what do you mean by the continuum of care?" Well, when you're dealing with a patient that had bladder cancer, colon cancer, et cetera. Unfortunately, because I don't wish this upon anybody, they have to have a stoma. You're basically, frankly, puncturing the abdomen, okay? Guess what? That happens in a hospital. We call that the acute setting. Typically, you've got the post-acute setting, you've got the community setting. We need to be able to follow through that patient with the relevant healthcare providers and the relevant consumer. In some countries, we do that incredibly well. I was recently in Colombia and Brazil, and I was able to observe how we were doing that with our clinics and all of our commercial team. Frankly, in some countries, we don't do that all that well. That's why there's too much variance.
Therefore, the word, we need to consistently execute commercially across the continuum of care. Okay? The second thing is we need to refresh our portfolio. We've not refreshed our portfolio. It's been too long. We're in the midst of developing Esteem 2.0, which is a one-piece convex soft offering. We're very excited about it. We are on track to go ahead and launch it. We're gonna make all of our preparations in 2023, and the plan is to launch it in the first half of 2024. Again, this is a good business. It's growing. We need to go ahead and drive that growth. Continence Care. Again, another terrific business. We lead in North America. This business, again, if you just look at Continence Care, was growing mid-single digit at about 5%.
We have amazing service levels with the home service group in the U.S. Now we've been able to establish comparable or very good service levels also in the U.K. They've taken charge of that. Now all of a sudden, when it comes to new patient starts, we're driving new patient starts. Beyond that, we've expanded our portfolio to have both a Cure product portfolio, this was an acquisition we made couple years ago, along with the ConvaTec product portfolio. Lastly, where we've had a modest presence, Europe, we're going ahead and building our commercial infrastructure in places like the U.K., and France and launching new products in new segments, such as the compact or discrete area, and that's where we've launched GentleCath Air for Men. What do we need to do in 2023? We need to sustain our leadership position in the USA.
That's absolutely imperative, okay, from a service perspective, and keep on broadening our portfolio. Taking our compact offerings and introducing them in the United States. We need to keep on growing in Europe and frankly, also in global emerging markets. We see opportunities in places such as Korea to go ahead and grow, in places such as Colombia. Lastly, we plan to launch a compact formulation, again, of our GentleCath offering, but for women, right? That launch, again, is on track, and we would anticipate being able to go ahead and do that in late 2023, possibly early 2024. Okay? Again, a good growing business, recurring revenue. What about intermittent? What about Infusion Care? In the Infusion Care area, what you see us basically doing is that last year, we produced and we sold 110 million infusion sets.
That was to treat critical patients, right, about 1 million patients worldwide. As you think about that, frankly, we've not been able to keep up with demand. We've been capacity constrained. Jonny commented about the CapEx. Guess what we're doing? We doubled the capacity of production in one of our two major sites in Osted in Denmark. We launched extended wear infusion sets in the USA. Very strong demand for this, right? Again, this dog really hunts. Now all of a sudden, we find ourselves in a situation where we need to scale up the production of our extended wear infusion sets in 2023. At the same time, we're pursuing a strategy of diversifying the applications. We're very intrigued by diabetes, but on the other hand, we wanna expand and diversify. We're working with AbbVie.
AbbVie has gone ahead and submitted its regulatory dossier in the USA, in Europe and Japan for an carbidopa/levodopa dual suspension to treat severe Parkinson's disease. We would anticipate that they'll receive regulatory approval in the second half of 2023, and this creates a good opportunity for us to further grow our infusion care business. In the area of diabetes, we've been collaborating with Tandem. Tandem is anticipating in the second half of 2023 to launch what they're calling their Mobi offering. This is a hybrid pump system, much smaller. You would use a smartphone to go ahead and run it or operate it, and there's an opportunity for us again there to potentially drive some growth. You ought to expect this business to grow in high single digits. What about execution?
I was alluding to the fact that execution is absolutely critical, and we're doing this across the value chain, and that we're embedding ESG across all four stakeholders, right? Community, customers, employees, and commerce, meaning how we run the business. I wanna share with you now a video to give you a little bit more of an inside look as to how are we going about to go ahead and do that. It's about a three-minute video. Super. Hope you got a little bit of a qualitative feel of how we're approaching ESG. One of the things I'm particularly sensitive about is that whenever you're approaching these thematics, that there actually be real substance behind it, right? I wanted to go ahead and share with you, really quickly, three key statistics, just to kinda give you some sense of substance.
The first one really relates to the whole area of community and what are we doing about the planet. What I can tell you is that in 2022, we went ahead and reduced our greenhouse gas emissions by 32%. What I can also tell you is that in 2023, 100% of the energy used in all of our factories will be renewable energy. You might say, "Well, what are you doing with customers?" What I can tell you with customers is that we're improving the quality of our products. Again, there, what I'll share with you is that we reduced the complaints per million by 13% last year. During the course of the last three years, we've actually reduced the complaints per million by about 40%, okay? We're improving the quality of our products. We're being more environmentally friendly.
When we talk about DEI, diversity, equity, inclusion, and wellness, for us, it's not just an acronym. We really are committed to creating a diverse and inclusive environment because fundamentally we believe that that's gonna allow us to win in the marketplace. We've absolutely committed to having at least 40% of senior leaders at ConvaTec be women. In 2022, we're already at 38%, and I'm confident that we'll go ahead and achieve that goal. Hopefully you're getting a sense that we're embedding ESG as part of execution, and there's real substance to what we're actually trying to do. Let's go back to what is it that we've been trying to achieve. We've been trying to achieve sustainable and profitable growth.
I think this graph does a really good job of illustrating to you that if you go back to 2018, our revenues were basically flat as a pancake. You clearly see an acceleration in revenue growth, right? I mean, that's hard data. You look at our operating margin, it came down. We communicated to you and said, "Hey, we're gonna invest more in R&D, we're gonna invest more in commercial, and we're gonna knock down G&A. We're gonna rebalance the P&L." That's what we're doing, right? That's exactly what we're doing. So what that's translated into is that when you look at operating profits, right? Something that's a really good sign of how the company's performing, we see an acceleration in operating profits. For the first time, we achieved double-digit operating profit growth in 2022. What about medium-term? What's gonna happen medium-term?
I think what you're gonna see us do medium-term is very consistent with what we shared in November. We're gonna consistently deliver 4%-6% organic revenue growth year in and year out. In terms of margin, we're gonna progressively grow our operating margin. We're gonna work at it year in and year out to ultimately achieve mid-20s operating margin. We're gonna actively pursue bolt-on acquisitions that can strengthen our competitive position in the four categories and the 12 geographies. They can be technology-oriented, geographically-oriented, or capability-oriented. What that means to you fundamentally is you ought to be anticipating and expecting us to deliver double-digit compound annual growth rate in terms of earnings per share and free cash flow. Let's try to summarize. What have Jonny and I tried to share with you here today?
The first thing we've tried to share with you is that we had strong financial performance in 2022. Organic revenue growth, 5.6%. Operating profit growth, double digit. When you look at that, I think that's a positive and encouraging picture. In terms of guidance, we've said 4.5%-6% on the top line. Growing the margin in a modest manner to at least 19%, 19.7%. When you think about what about the medium-term prospects, hope you've gotten the sense this is a stronger business. The competitive position has really strengthened of our business, and it's a chronic care business, so think recurring revenues. B, hopefully you got a sense that there's a stream of new products that are coming across all four categories, right? That bodes well.
That ought to translate in terms of medium-term prospects for double-digit EPS growth and free cash flow growth on a compounded annual growth rate basis. I hope that was helpful. So thanks to everybody, and we'll open it up for Q&A. Okay. Hassan, you're the first one up, so... Just maybe, just identify yourself, please. Thank you.
Thank you. Hassan Al-Wakeel, Barclays. I have a couple, please. Karim, in late summer last year, I think you commented that the share in U.S. Ostomy was stabilizing. I wonder if you're starting to see any share gains at all, given stronger growth in the business that you talked about, and what you consider to be the realistic share opportunity in this business, given your expectation of mid-single digit growth. Secondly, you narrowed the top-line guidance, and I'd love to know what is giving you the incremental confidence here compared to, you know, when we all got together at the CMD last year. How has the year started? I'd love to get some color on your expectations around the different segments. Thank you.
Yeah. Maybe I'll do a little bit of a double act. I'll tackle the first one, Ostomy Care U.S., what's happening there and potential share trends, and then why this sort of tighter range. Maybe Jonny and I can do a little bit of a double act on that. Look, I think in Ostomy Care, I think what's fair to say, Hassan, is that we've stabilized the new patient starts. That's real positive. In the acute setting, we're getting, you know, our fair share there, right? I think it's premature and too early, frankly, to say that we're actually growing share, right?
As I was saying, you need to make sure that not only are you getting new patient starts in the acute phase, but you need to do that in the post-acute phase and in the community side. I think the community side, I feel very good because we're collaborating very closely with the home service group, 180 Medical. You know, this is a group of several hundred people that does an amazing job with the intermittent catheters, right? We created a pilot several years ago and said, "Well, could you do the same thing in Ostomy Care and provide this wonderful service to consumers?" We've been doing that, and that's doing also very, very well. I'm a little reticent at this point to say we're gonna grow share, Hassan. What I prefer to say is we're gonna, at a minimum, hold our own.
I think in terms of significant growth opportunities, clearly emerging markets, there are significant growth opportunities there. I think we're just starting to scratch the surface there in terms of seizing the opportunity, is what I would say. Why, why the higher confidence, or why the 4.5 or narrower range? You know, fundamentally, I think it's just a reflection of the fact that we are in the midst of launching newer products, and frankly, we're just executing better, whether it be in commercial, whether it be in quality and operations. That bodes well in terms of your ability to drive the top line. Maybe, Jonny, you'd like to add to that.
Yeah, just to the other points in your question on sales as well. We set out how the categories would grow back in November, and for the year ahead, it's entirely consistent with that. Ostomy Continence in mid-single digits, Wound Care mid to high, Infusion Care, the fastest at high single digits. That hasn't changed. The year has started fine, but I would like to, you know, just remind people that the first half will grow slower than the second half because of the Infusion Care comps. You know, that was very high growth last year. That won't be repeated. And then the only other thing I'd add in terms of increased confidence was, of course, we're gonna get ATT this year adding into organic growth from mid-March, and that will help.
Just to follow up on the phasing. Outside of Infusion Care, would you expect a normal phasing for the other segments?
There'll be a little bit in Wound Care. If you look at the comps from last year, Wound Care was faster in the first half than the second, but it's not very marked. The big one is Infusion Care. That's where you make the difference.
Graham?
Thank you. Graham from UBS. Maybe just to follow up to Hassan's question. ATT, you sort of got there for me. If I work that through, that's at least a 50 basis points tailwind on organic growth, I think, for 2023. Given you've got these launches, you're executing better, is 4.5%-6% not a little bit conservative? Then just on the margin side of things, it'd be useful to know, the 19.7% is sort of the bottom end of the range. Does that assume you're at the 7% rather than 5% for the inflation? If you think about the COGS and the labor inflation. Basically, what I'm trying to say is you did 19.5% on a 19% guide last year. Are you being too conservative again this year deliberately?
I'll pass that on to Jonny.
Okay, well, there's two parts to it. Same theme, sales and margin. Look, it's early in the year for sales, and there's a lot of uncertainty in the world. We have bumped up the bottom of the range compared to the medium-term targets, and that's partly for the reasons we just said, to reflect the fact that you're right, ATT will add a little bit.
You know, that's a good range, 4.5%-6%. You know, it feels like the right way to be starting the year. Let's see how it goes. There's a long way to go. On margin, you would expect us to be calculating. You know, it's not, it's not a precise art, this inflation. You know, last year, we estimated 8%-9%. We ended up at 8.6%, so bang in the middle. This year, we're starting the year with 5%-7%. The most likely outcome, we think, is in the middle of the range. You know, delivering a improvement in margin, no matter... It's only modest, but an improvement in margin against the headwind of inflation of three points.
You know, we think that's a big job, and that's why we just wanna be sensible. We don't wanna be promising things that we don't deliver on.
Thank you.
Thank you. Ed Ridley-Day, Redburn. First, just a follow-up on Infusion Care. Could you just give us some color around the assumptions you're making, first of all, if you can, around the AbbVie business. Secondly, obviously positive to hear confirmation on Tandem Mobi. Tandem talking about a second half probable approval there. If you can give us some color on the assumptions you're making for that business as well and the IC guidance, that would be helpful. The second question, a sort of broader question. As you help me highlight it, you know, you are making progress and very strong progress on your own products. You still have third-party products as part of your portfolio. How should we think about the opportunity to reduce that business over time and further accelerate that mix shift?
Look, what I would say with the AbbVie launch, I think it's difficult to say. I think even just for AbbVie to figure out, you know, what is the scale of the opportunity. Analysts have highlighted, and to some degree they have, to be fair, that they view this as a blockbuster, meaning a billion-dollar plus opportunity, right? I would say that that's significant. You gotta sort of translate and say, "Well, what does that actually mean for your business," right? I think it's kinda early days. Let's first of all, knock on wood. I hope this is wood. That they receive their approvals, right? I think if they do, I think there is a significant unmet need when you look at late-stage Parkinson's, frankly, right?
There's a whole series of treatments that you could be using, you know, oral forms of dopamine, but after a while they don't work, then you go to apomorphine. You look at some of the surgical interventions today, they are very, very heavy. I mean, expensive, tens of thousands of dollars, very invasive. I think, frankly, if their offering works clinically, I think it could be a very interesting opportunity. There's a fair amount of uncertainty, so I think it'd be premature, Ed, for at this point to say, "This is exactly how much it's gonna be." On Mobi, again, look, I think the concept makes a ton of sense. You know, sort of a hybrid version, so now the pump is much smaller.
I'm maybe going ahead and using my smartphone to be able to say how many units of insulin do I need, yada, yada. I think the concept is very intriguing, particularly as you see automated insulin delivery growing, more usage of continuous glucose monitoring. Again, I think it's really in Tandem's hands for them to be able to go ahead and secure that approval. We're following, you know, all the public information that we all are aware of. In regards to the third-party products, I would say fundamentally, what we wanna do is provide patients and healthcare providers with the very best solution, right? Our view is we've got some formidable offerings ourselves. Guess what?
I would anticipate that a result of the needs of the customers and us continuing to strengthen our offering, that the proportion of product offering coming from third parties would continue to diminish, in fact.
Thank you for that. Just a quick follow-up on the, on the infusion care. Is it fair to say then that the contribution from those two would be incremental, very much incremental in terms of the guidance you've given today?
I'm not sure I would say incremental. I would say that their contribution, would be modest.
Thank you.
Oh, Veronika, sorry.
We'll make it easy. I'm just pass the microphone.
Yeah. No problem.
Veronika Dubajova from Citi. Thank you, guys. I have three.. Questions, if that's okay.
Yeah.
The first one, just wanted to understand the 130 basis points of positive price that you achieved in 2022, which parts of the business it was most pronounced in. Just help us understand maybe divisional contribution there. That would be helpful. Second question. Karim, you've spent a lot of time talking about some of the new products this morning. One of the ones that was notably absent was the catheter launch. Just curious how you feel that's progressing in U.K., and France, and should we read anything into the sort of absence in the slide deck this morning? My third question, which is the bigger picture question from a portfolio perspective. You've done a tremendous amount of work of cleaning out the business.
There's also some reshuffling of where parts of the business sit that you talked about in the press release. Are we done, or is there anything left that you are thinking about from the shape of the portfolio and what's left in the company that might not maybe make sense and that you'd like to address in the short term? Thank you, guys.
Sure. Why don't maybe I'll let Jonny handle the price question around the 130 basis points, and I'll take the question around catheter launch and portfolio.
Sure. Look, on price, it was spread across all categories. You know, we have been
Spreading best practice from our centers of excellence across everywhere. Geographically, we did see some benefit in Global Emerging Markets, it's fair to say. All categories. Remember that 130 basis points in revenue, that translates into about 50 of gross margin. That was what we were expecting and kind of what we guided to in November. We're expecting roughly similar in the year ahead. I wouldn't wanna call out that being more predominant in any one category than another, to be completely honest.
Okay. Veronika, to your question on catheters. Just to clarify, in case there was confusion, definitely have it on there. It's doing well. That's the short answer. Let me expand on that. You'll note just where it says 2022 progress, GentleCath Air for Men in France and the U.K. Again, these are relatively smaller opportunities for us. It's the 1.0 version that we've introduced. What we've taken is we've taken our GentleCath technology, right? Where in essence, when you think about the whole aspect of friction, if you're having to use a catheter, friction would be bad, right? You don't wanna do that. You don't wanna harm your urethra.
What's interesting about our technology, in fact, is we've actually now received a superiority claim in the United States by the FDA for superior comfort, frankly, and that fundamentally, we do less damage to the urethra, right? For us, it's much more about, we think that the GentleCath technology is really, really good. The male formulation or form factor is competitive. You can kinda see it. It's left of Cure. It's competitive. We're already developing 2.0, this is just an entry. Again, we've entered the discrete or compact area. We'll be launching it also in the United States. When you see, for example, GC Air for Women, that's actually a 2.0 version that will be coming about. That form factor is even further developed, right? I think the bottom line is it's early days.
The 1.0 version is just being introduced. I think that fundamentally, there's a real opportunity for us there, is what I would say. On the portfolio question, I think we've identified the four key categories that we wanna pursue, and they're the ones. Those are core. You know, advanced wound care, Ostomy Care, continence care, and Infusion Care. Keep on saying that. We just wanna make them stronger and better, et cetera, et cetera. Fundamentally, I'd say maybe at the margin, you know, customers or maybe certain product lines. Fundamentally, I'd say, I think we have pretty good clarity as to what are the categories and what are the geographies that we really wanna win in.
Can I just quickly follow up on the superiority claim that you're getting in the U.S.? Is that gonna give you better reimbursement? Is there a new code that you're getting on the back of that?
The short answer is no. I think the reimbursement codes will stay the same in essence, and fundamentally just ought to help us in terms of our ability to share what it is that we're offering with healthcare providers, which are typically nurses who are working in a urology center.
All right. Thank you.
I'm supposed to go from. I'm gonna go to a gentleman here 'cause I passed before, and we'll try.
Thank you. It's Kane Slutzkin from Numis. Just a question, guys. You've mentioned sort of GEM quite a few times in terms of mid-teen growth.
Yeah.
I'm just wondering sort of what it's 15% of revenue? Yeah. You know, where do you see that going in terms of the mix, and to what extent is that in your sort of guidance, the 4%-6% as to long term? I.e., is that a bit of potential upside? Just on the Vitality Index, which you guys haven't really brought up today.
Yeah.
Where are we on that, or is that just the case of you've just got three new products and it's a bit too early, but to be giving that number? Just wondering where we are relative to the 30% target. Just maybe finally following on from the gentleman's question on infusion, just sort of any additional color you can give us on sort of some of the dynamics playing out in the pump market, whether it be opportunity or threat, you know, patch versus durable, et cetera, and maybe a little bit on your, your monitor, tech platform and the opportunities you see there. Thanks.
Yeah. Look, what I would say on global emerging markets, very significant opportunity, clearly. 85% of the world population, right? All these chronic diseases, diabetes, cancer, autoimmune diseases, they're just growing in a very significant manner. A lot of it, frankly, is about providing access here, right? frankly, we're investing in a very significant manner. I mean, just let's take a place like China, which oftentimes is described and talked about. We'll continue to invest. We believe that that is gonna be significant growth there. Brazil, we're gonna keep on investing and growing. Colombia, we're gonna keep on doing the same. To your very specific question, which is, hey, so is there upside to the 4%-6%?
I think back in November, someone said to me, "Hey, Karim, could you do better than 4-6?" Look, at the end of the day, absolutely we're gonna strive to do better than 4-6, right? At the end of the day, I think it's also important to say what you're gonna do and do what you're gonna say, right? You know, that's the way I'd answer that question. The Vitality Index, we made good progress. 21, we're about 25 points. 22, we're about 26 points. We're gonna keep on driving that, and our ambition is to get to 30%. I think that's happening. Dynamics in the automated insulin delivery area, durable pumps versus patch pumps.
Look, what is fundamentally happening is that continuous glucose monitoring is really helping revolutionize the way you take care of type one and type two diabetes patients. 'Cause you no longer have to do the finger pricking anymore. Every five minutes, you can have a reading. You can use the Dexcom tool. You can use the Abbott tool. You connect it into your pump and now they have these amazing algorithms. They call them, you know, Control-IQ, they're smart. If I have some ice cream, I happen to like ice cream a lot, all of a sudden, it just knows what to do, right? Which is pretty awesome, frankly.
We think that automated insulin delivery is gonna continue to grow significantly, both in type one, which, for example, in the U.S., maybe a quarter, no more than a third of folks are using today, the whole idea of an automated insulin delivery system, and certainly less than 5% in type two. I think that that segment is gonna continue growing. Now will it be a durable pump or will it be a patch pump? I think the reality is there's space for both, right? I think this idea that one is gonna do better than the other, no. Now, sure, there are some companies in the patch pump area such as Insulet, they're doing very well. They have a, you know, really interesting product offering.
From our vantage point, we are agnostic because when you look at our infusion set technology, we have the inserter, right? That inserter can be used with a durable pump, a patch pump, and a continuous glucose monitor. I did say that. Durable pump, patch pump, continuous glucose monitor. Okay, just to give you a sense. It's not just the tube, so to speak. I was commenting on the inserter. Then you think about, for example, the whole idea of the cannula with the adhesive, right? That's where it's actually is going under your subcutaneous tissue. Well, that's really cool technology. Guess who knows a lot about skin irritation? Guess who knows a ton about infections? Think about our wound care business. Think about our Ostomy Care business.
Now that we run R&D on a global basis, we can take that know-how and leverage it frankly there also. It's, it's a long answer to basically say, I think that the automated insulin delivery segment, whether it's patch or durable, creates opportunities for us. We wanna grow there, but we also wanna grow above and beyond that in areas like pain and areas like Parkinson's. Yep. Charles.
Hi, Charles Weston from RBC, standing in for Jack Reynolds-Clarke. Three questions, please. The first is on the margin improvements that you're gonna be making to offset that 300 basis points of inflation. You provide a bridge on page 10 for 2022. You're looking at sort of 320 basis points or more of offsetting of the inflation. Roughly speaking, how will that bridge look in a year's time looking back? What are the key drivers there? The second question is on pricing and your positive pricing and those contract negotiations you have. How delayed are those negotiations after inflation, i.e., sort of how long after inflation are you able to negotiate a price increase and how quickly do they kick in?
Therefore, once inflation declines at some point in the future, do we have a sort of a kicker of a year or two afterwards where we get some pricing increases? Then just lastly, can you give us some modeling guidance on non-operating costs like interest and tax for 2023, please?
Shall I get going? Yeah. The bridge? Do you wanna take the margin and then the guidance? Yeah. I'll take the middle one. Yeah. The last slide we showed in the pack was the medium-term guidance on margin. It identified three buckets. In 2022, the G&A bucket was bigger than the others. In 2023, I'd expect it to be more balanced. We would expect to see progress on all three of the buckets: mix and price, operations productivity, and G&A. You know, I don't wanna go into specifically how much, but they'll all be contributing, you know, significantly to overcoming the three points.
you know, if I had to indicate, I think mix and price will be a good one in 2023 because we've got a tailwind of mix effects coming through from the rationalization of SKUs that we've done, from the increase in ConvaTec products and also from the flip from hospital care to ATT. Those are all strong mix factors that will help our margin in 2023. You asked about modeling guidance. I think we've got it in the slides in the appendix somewhere. on tax, first of all, you know, we're expecting the book tax rate now to stay pretty stable, a bit shy of 25% going forward.
The cash tax rate will be lower, more like 18%-19% going forward, and then ticking up eventually towards the book tax rate, but not for a while. On financing costs, we're indicating $70 million-$80 million, which is a reflection of the higher market interest rates flowing through obviously to some of our debt being floating rate.
Thank you.
Do you want me to comment on the price? Or are you good? No, no problem. Just wanna make sure we're thorough. So look, on the pricing side, what I would say is our ability to manage strategic and tactical pricing varies by category, right? So in the infusion care situation, it's much more of a business-to-business relationship, right? There you're trying to go ahead and share in the value. I would say that you feel the inflationary pressures immediately, whether it's on labor or resins or utilities. And you've got some degree of freedom there, depending upon if you're being able to provide value. I would say maybe typically there to see the full impact anywhere between maybe 12-24 months, roughly, right?
Just as it flows through, depending upon how much increase you have, et cetera, et cetera. The other categories are more reimbursement driven. Typically, if you're in the U.S., you're talking about private payers. If you happen to be in Europe, it's typically national health authorities. In emerging markets, it tends to be a mixture of cash, private insurance, national healthcare system. I think there, your degrees of freedom at the reimbursement level are frankly more modest. You need to think that, you know, we're the manufacturer, and then you got the reimbursement agency. There's a whole bunch of folks in the middle. How do you manage that proactively, right? There, I would say again, there's probably a little bit of a lag effect of about 12 months, roughly, you know, give or take.
I don't think it's a significant lag, but certainly there is a lag of sorts, is what I would say. Please.
Hi, Seb Jantet with Liberum. Two questions, if I may. First of all, just going back onto pricing and picking up on Veronica's question about that 130 basis points on the revenue, and I think you kindly said that that would give us about 50 basis points on the gross margin this year. I'm just wondering how that kind of breaks down. A lot of what you were doing in the past was taking areas where there were discounts that were being applied inconsistently across the board and putting those through, i.e., things that are much more in your control, versus seeing some underlying kind of price increases and whether those are actually coming through.
Just trying to get a sense of how much that improvement is coming from a continuation of what you did last year, or how much of it is coming from actual underlying price increases? The second question was just around the labor cost guidance. You've given 5%-7% guidance for the increase in labor costs. I'm just trying to get a sense of how much, if any of that, is annualization of last year's increases versus how much is actually an underlying assumption for the increases for this year?
Yeah. I'll take maybe the first one, then Jonny, you might take the second one. I think on the first one, look, I mean, there's obviously low-hanging fruit around pricing discipline, right? Simple concepts like we will have a floor price, period. There's one chief operating officer, he or she runs the category, and that's the way it works. Okay? We did not have that before. It was a highly decentralized model. Every geography did what it wanted. I think we're getting more astute as to, well, when do you need to apply a discount? If you are gonna apply a discount, then you need to perform, right? Which is, well, if you purchase more, then you get the discount, not... I think there's still a fair amount there to be done.
I think then there's also the aspect of strategic pricing, which maybe gets into a little bit more of are we capturing fair value for our product and service offering? I think there, we're starting to, frankly, just scratch the surface there. Look, I don't think it's gonna be an area where you're gonna fundamentally drive the margin hundreds of basis points per annum. I think it's an area you've got to stay focused on as you think about your portfolio. You know, we're continuing to invest in the pricing center of excellence, and I think it's gonna continue to bear fruit here during the course of the next several years.
On the labor point, most of it is increases to come. There is a bit of flow over from last year, but what we are seeing is that the cost of living pressures are weighing on our colleagues, and pay awards will be higher in the year ahead than they were last year.
Thanks.
All right.
A couple questions from me, Jens Lindqvist at Investec. Both on ConvaFoam. First of all, what you see as a realistic target market penetration in the U.S., I guess, for that product over time. I guess what I'm asking, really, if you believe you can in any way replicate the dominance that you have with AQUACEL Ag, or if the competitive, you know, positioning simply will not allow that. And secondly, also on the pricing of that product, to what extent you are achieving a premium pricing for that or if there is a period of promotional pricing initially. And the final question on that is just out of curiosity, really.
You know, whether the work that you've done on the adhesive qualities of that product, excuse me, in any way related to the progress you're making in Ostomy Care. Thank you.
Sorry, I'm just writing down here. Look, in terms of share of market, I think it's a good question. You know, historically, in the foam segment, we probably hovered on a worldwide basis, at approximately 5%, right? Pretty modest. What do you expect at ConvaFoam? I think I'll answer it by saying two things. One, my expectation is that at a minimum, we need to achieve double-digit share of market. Okay? How much beyond that, Jens? I think it's too early to say. Let's see how we do, how the product performs. Equally, I think it's a lot about commercial execution, because fundamentally, we're leveraging our relationships and our know-how and our knowledge, because we have a very strong commercial presence in wound care on a global basis.
How do we leverage it beyond AQUACEL with foam and our other product offerings, right? That's the way I'd answer that one. On pricing, fundamentally, we're trying to be competitive, right? We think we've got a really good offering, which is significantly improved, above and beyond what we had historically. Then to your technical question, in terms of knowledge, what I would tell you is that as we developed ConvaFoam, we do tend to leverage competencies across all four categories. For example, when you think about design for manufacturing, right? That leader will think about it for Ostomy Care, for wound care, continence care, et cetera. When we think about adhesive technology and know-how, there is a knowledge element that is utilized across all four categories.
We're doing that more and more so because we think it's a really good opportunity.
Hi. Christian Glennie with Stifel. Just one on the pipeline and then one on M&A. Just to pick up on the ConvaTec versus Avel 2.0. Well is it more than just a brand change? Any update on there and also on timings of that particular program. On M&A, obviously you're at 2.1x today. You've said you'd be happy to go to 2.5. I was just teasing out the nuance of that. Is it 2.5 to then as long as you can get it quickly back down to the two? Would you then go to 2.5 on some more of a stable basis?
What is the sort of pipeline of opportunities that... How active are you? You know, can you give any sort of context around that?
Yeah. Maybe I'll take the ConvaTec question. Jonny, let you take the.
Yeah.
How active are we and what about this 25 number? How do we think about it, I think. Look, on ConvaTec, what it is, it's a reflection that fundamentally we felt that Avel 2.0 did not reflect the significant improvement we're gonna make. It's that simple. The brand in essence is signaling to you, this is truly a new platform we're developing. We're making good progress there. I would say in terms of timing, I would anticipate 2024 and beyond as you think about all the various geographies. This is clearly something that we're very committed to, but it's in development at this point, is what I would say.
On the M&A, look, we remain vigilant. We've managed to secure some really nice additions to the portfolio, which have increased our competitive strength in our focus areas. To the extent those, there are more of them out there, we'll look to do the same. On the leverage point, yeah, we've said 2.5x we'll be comfortable up to. You know, this is flexible, but the target is two. We will always be looking for a clear way back to two. You said quickly. We haven't specified a timeline on it, but this business generates strong cash flow. You know, knocking 0.5 point off leverage does come around quite quickly, absent M&A.
Is there a question in the back? Any other questions? Do you wanna wrap? Please.
Morning, guys. It's Sam Englander from Berenberg. You called out strong performance in GEM, in Ostomy, including China, which seems a little at odds with what some of your peers have been saying. Could you just elaborate a bit on the drivers there? You touched on the commercial execution point in Colombia and Brazil. I was just wondering to what extent you think you can take the learnings in that market, maybe apply them to other GEM markets or even sort of some of the developed markets as well to drive growth.
Yeah, it's a good question. I would say, look, that on the China question, we've been investing there for several years and fundamentally, we really strengthen our commercial presence. What it really starts with is, there's probably about 10,000 hospitals actually, but there probably are about 1,000 that really count, right? Our level of penetration historically have been very modest, right? Let's just say hovering around the 100, approximately. We had much more what I'll call a export mindset. There's this thing, China out there. In our view, no. This is the second-largest healthcare market in the world. It's gonna grow. There's a lot of unmet needs. We need to actually actively compete there. We need to build out our presence.
The way we're thinking about it is, you know, that presence, of course, needs to start with a commercial presence, but frankly, it could expand to other parts of the value chain, right? How are we winning there? Well, fundamentally, it's about focusing on the right healthcare providers, but in Ostomy Care, also being able to provide services directly to consumers. I think what's basically happening there is that, you know, everybody, all the various players, are just having to work a little harder, and that's a good thing because I think that, you know, historically, you know, maybe as a company, we'd scored a few own goals, if that makes sense. You know, you're not gonna win if you're scoring own goals.
It's important to put them in the net on the other side of the equation, so or on the other side of the field. Anyway, I could get more into it if you'd like, but fundamentally, I would say, there's a real opportunity to grow in GEM. Can we take the learnings? Absolutely. There's no doubt. There are huge learnings that we can take from our operations in Latin America. I mean, these folks they grow their business in mid to high teens, right? The way they work with healthcare providers, the way they work with, frankly, consumers is amazing. Like in Colombia, we actually have our own home care service. We literally I was visiting with one of our nurses, you know, a patient, who frankly had bladder cancer, colon cancer, and a fistula, three stomas.
We were visiting the patient literally in their home, right? You can just see how there is this element of we're fundamentally focused on caring, helping that individual, educating the clinicians. I think there's a lot of learnings that can be taken from what we do in Colombia, what we do in Brazil. It's one of the reasons why we appointed Bruno Pinheiro, who ran Latin America very successfully for many years to run Ostomy Care. That's how you start doing that. I could keep on going on, but I think good opportunities to do both. Okay. We may have exhausted all the questions.
Yeah.
It looks like it may have stopped raining also, guys. Super. Look, just thank you very, very much. Really appreciate everybody's time and we look forward to staying in touch.